Australian firm still wants to buy Meadows

February 25, 2009 12:00 AM

By Gary Rotstein Pittsburgh Post-Gazette

Representatives of The Meadows Racetrack & Casino and the Australian firm trying to buy it insisted yesterday that they want to complete the deal, despite efforts to back out by a part-owner of the foreign company.

A spokesman for The Meadows stressed, meanwhile, that the dispute holding up the sale will not affect the planned opening in April of the Washington County racetrack's permanent casino. It is to more than double its size, which will give it about 3,800 slot machines.

"The recent developments have no bearing whatsoever" on proceeding with the project, said Meadows spokesman David LaTorre. "We are on schedule, and that has not changed."

A statement from Crown Ltd., the Australian company, also sought to dispel suggestions that the firm has lost interest in completing the $1.8 billion purchase of Nevada-based Cannery Casino Resorts, which owns The Meadows and two casinos in the Las Vegas area.

Major interests in Crown are held by company Chairman James Douglas Packer, who has made Crown a major international gambling firm after inheriting a fortune, and his sister, Gretel, who now wants no part of the Meadows purchase because of public disclosures it would entail due to Pennsylvania regulations.

While it's possible there is a split within one of Australia's wealthiest families over the transaction, a statement issued by the company said, "Crown is committed to the Cannery acquisition and continues to work with the Pennsylvania Gaming Control Board to resolve outstanding issues in Crown's application."

Those "outstanding issues" concern an attempt by Ms. Packer to withdraw her name and that of three family trusts she controls from the licensing application before the Pennsylvania Gaming Control Board. Ms. Packer and the trusts hold shares in Crown, and her lawyer told the gaming board Friday that she has privacy concerns that would be jeopardized if the board makes information about the license applicants public.

While waiting for the gaming board to act on the withdrawal request, Ms. Packer and the trusts, known collectively as Consolidated Custodians International Ltd., also filed suit in a Delaware state court Monday trying to win a judgment excluding them from any role in the sales agreement between Crown and Cannery. The suit stated that Cannery's counsel has sent threatening letters about legal claims that would be filed if the actions by Ms. Packer and the trusts interfere with completion of the Cannery-Crown sale.

The suit, filed in Delaware's business court because of a provision in the sales agreement naming it as the source to settle any disputes, also said that Cannery's counsel has accused Ms. Packer and the trusts of "collusion with Crown as a pretext for reneging on the purchase agreement."

The public statement by Crown officials appeared to deny any interest in reneging, however, and Bill Paulos, a principal in Cannery, said he is confident the sale will proceed. He said the problem arose because Pennsylvania places more stringent requirements on disclosures by license applicants than is the case with Nevada regulators, who already approved their part of the Cannery-Crown sale.

"This is much ado about nothing, a procedural thing," Mr. Paulos said. "In every deal of this size, there's up and downs ... and Crown is continuing toward licensure in Pennsylvania."